Author: Greg Swann (page 203 of 209)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I’ve written about our signs before. Counting the custom rider and the rental for the post, a configuration like that shown to the right costs about $275. The post rental is per house, of course, as is the cost of the rider. The top and middle signs are re-usable, but the weather is not kind to them. We don’t want our signs to look beat-up, so we rotate them out as soon as they start to look worn.

We’ve been playing with four-color ink-jet sign printers on the riders, and I’ve known all along that someday we would be able to do custom signs for each of our listings. That day may be today. We’re meeting with a sign vendor who has a massive six-color digital ink-jet sign printer. If I can get the kind of UV and scuff-and-scratch protection I’m looking for, we may make our move now.

This is Seth Godin from November of last year:

If you’re in any business where the cost to enter as a competitor is very low, you’ve got this problem. The minute there are big profits being made, competitors will flood in and steal them. This is why there are five times as many real estate brokers in San Francisco as in Steubenville, Ohio. Because the houses cost five times as much, the commissions are five times as great, so brokers show up in enough volume that everyone goes back to making exactly the same amount of money.

The only way to win is to break the rules. To play by your own rules, creating a market in which the cost of entry is very high, or even impossible. If you’re the only one, then you win, by default.

Mr. and Mrs. Homeowner, in addition to everything else we’ve talked about, I will produce huge, stunning, traffic-stopping, custom yard signs for your home in less than 24 hours. Is there any other Realtor you’re talking to who will make you this offer?

Further notice: Doable. Two days turnaround, which is fine. The funny part is, our current sign philosophy (which is version 2.0 for us) is losing the CRS Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

The Real Estate Bloggers have a nice post on one of my pet peeves in real estate, the lease option/lease purchase scam:

If you are serious about buying a home, spend the time that you would have rented a lease purchase and save hard, clean up your credit report, and focus on the opportunity. By buying into the opportunity for a lease purchase you are limiting your opportunities to one home and putting yourself into a relationship that could end up setting you further behind in your attempts to become a homeowner.

Songwriter James McMurtry (son of novelist Larry McMurtry) nails the issue in Choctaw Bingo:

Uncle Slayton’s got his Texan pride
Back in the thickets with his Asian bride
He’s cut that corner pasture into acre lots
He sells ’em owner financed
Strictly to them that’s got no kind of credit
‘Cause he knows they’re slackers
When they miss that payment
Then he takes it back

If interest rates rise substantially, we may see a return to the days when financially solvent people purchased homes with carry-backs, wraps or land contracts. But, for now, these tricks are just one more sucker’s bet for folks who got themselves into trouble in the first place by being suckers for just about anything.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I wrote this earlier today as a response to a comment, but I think it warrants a post of its own.

Here’s the Cliff’s Notes: After a huge run-up in home values, so far the Phoenix-area residential resale real estate market has given back four percent from the peak in December of 2005. We have a surfeit of inventory, but I suspect that many sellers are loosely-motivated. We have a completely normal number of buyers buying a completely normal number of homes in a completely normal number of days on market at a completely normal level of discounting on price. The idiot newspapers cannot stop comparing current conditions to the middle of the boom, but if the current market is compared to 2003, it becomes clear that, except for the surplus inventory, we are in a relatively normal market.

Whatever might happen in the future in the Phoenix real estate market, it is clear that, after more than two years’ worth of predictions of imminent doom, our oft foretold Armageddon has not yet come to pass. These facts are documented here. The blockquoted matter is snipped from the remarks of my interlocutor.

What makes you so certain that the majority of individuals who are re-selling at the moment are “loosely motivated” as you say?

First-hand experience and peering into the MLS. The surge in inventory started about September of 2005, and, from the beginning, I had the strong impression that many of the sellers were owner-occupants looking to cash out at the top of the market. When I show, I see a lot of homes that are not market-ready. A significant number of homes aren’t even available to be shown.

It seems that this housing run-up has featured a lot of speculation from “flippers” who bought as an investment and plan on selling for a profit.

I do not have this impression. Certainly most of the homes I’m showing (and most of those I represent) are owner-occupied. I have investors with homes for sale right now, but none at fire-sale prices. To the contrary, my investors are doing very well.

For what it’s worth, most mainstream media reports Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Glen Creno of the Arizona Republic catches sight of The Mole:

That’s especially true these days in metropolitan Phoenix’s post-boom housing market, where nearly everything has reversed since last year’s frenzy. The number of homes for sale on the Arizona Regional Multiple Listing Service increased nearly four times from June 2005 to last month, when it hit a level nearly double what experts consider healthy. Last year, homes sold in about three weeks. Now, it’s about triple that.

Some of the post-boom market figures are closer to historic Valley norms, but many homeowners had their assumptions of what a house is worth and how quickly it should sell recalibrated by the buying craze.

If you can get your mind past the sad fact that the Republic has never heard of a year before last year, it’s actually a fun article about the added value Realtors can bring to their clients.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

That sounds like a late-night TV pitch, but it’s actually possible in residential real estate. Housing is distinct from other investment vehicles in important respects. Unlike securities, real estate is a hard asset with an enduring intrinsic value. There are huge tax benefits accruing from owning real property, either as an owner-occupant or an investor. Most significantly, real estate can be leveraged up to 100% of its value.

Yes, you can buy a home with “nothing down.” Through the masquerade of a seller concession, you can even roll the closing costs into the loan, so that you can take possession of a rental property with absolutely no money out of pocket.

Why would you want to do this? Because the purpose of investing your money in real estate is not to own it but to profit from it. Real estate investment books are filled with bad ideas — never buy a cash-flow negative property, buy the cheapest home you can find, buy four-plexes in challenged neighborhoods, pay ahead on your mortgage to increase your equity. These are all terrible ideas because your sole objective should be cash-on-cash return: How much money did you take out of your pocket at the start of the investment, and how much money did you put back into your pocket at the end.

Is a cash-flow positive property a bad thing? No, but a home that is cash-flow negative — if you can afford the negatives out of other sources of income — can be a much better cash-on-cash investment.

Buying cheap is usually a terrible idea. The money from real estate investing comes from appreciation, not rents. Unless you convert the property to a higher and better use, what starts cheap usually stays cheap.

In the same way, buying multi-family properties or other homes in bad neighborhoods is unlikely to be a winning strategy. Your ratio of rents to costs may be better, but your appreciation will almost certainly be worse than buying in a more-avidly-desired neighborhood.

And paying ahead on your mortgage is just dumb no matter where you buy. With a 100% leveraged property, every penny of appreciation is Read more